Lebanon’s new decentralization draft law may not solve all the country’s ills but, if implemented, could provide the answer to many of the country’s development challenges. The importance of the draft law lies in its ability to strengthen decentralization by transforming the Qadas, the administrative districts, into key developmental actors.

Instead of being headed by central government appointed Qaimmaqams (governor), Qadas will now have a council directly elected by the people. In addition, the Qadas will be endowed with a mandate to provide a wide range of services as well as the fiscal resources to do so.

The Qadas will now be responsible for developing their regions. This will include launching development projects in the sectors of infrastructure, transportation, environment, and tourism, among others. Many of these functions have been re-assigned from the central government because they are more compatible with the geographical area of the Qadas, and because the latter can better realize the economies of scale in the provision of services.

This does not mean that the central government becomes irrelevant, but that it merely shares these functions with other tiers of government. The central government’s role is now focused on policy making and regulation, while regional administrations take charge of service delivery.

The expanded mandate proposed for regional administrations is unworkable if it is not complemented with the required fiscal resources. Since several of the central government functions have been transferred to the Qada, it is natural that a portion of central government resources are transferred to the Qada level as well. To address this, the draft law has re-allocated property tax, a portion of the income tax, real estate registration fees, and other taxes and fees to the Qada in a way that provides the latter with an appropriate level of fiscal resources and autonomy.

The draft law goes further to provide a new source of revenues for the Qada, mainly the Decentralization Fund which replaces the Independent Municipal Fund. This created fund enjoys a new governance structure, more resources and equitable distributional criteria to both Qadas and municipalities.

Qadas with wide mandates and fiscal resources are a necessary but not sufficient criterion for delivering effective development. A key condition is political accountability. The draft law attempts to put in place the appropriate incentives and constraints in order to shape the behavior of local politicians and compel them to deliver more and better services. To this end, the main ingredients of the draft law that aim to achieve political accountability are as follows:

LCPS President Sami Atallah (second from left) presenting at a roundtable discussion on decentralization draft law in Beirut on April 16, 2014.

Municipalities are an important engine for economic and social development at the local level. City, town, and village governments are closer to their constituencies, and thus have a better understanding of citizens’ needs and concerns. Despite their importance, Lebanon’s central government only allocates 6 percent of its budget for local governments, while most countries spend on average around 27 percent.

While the idea of decentralization was first introduced in Lebanon with the 1989 Taif Accord, which ended the country’s brutal civil war, no government has successfully introduced or passed a decentralization law. But this is finally changing. CIPE’s partner, the Lebanese Center for Policy Studies (LCPS), is addressing the challenge of local governance at a crucial moment in the nation’s history.

During the Cold War, countries throughout the developing world, especially in newly-independent South Asia and Sub-Saharan Africa, implemented socialist and statist economic models. However, as the public institutions in these fledgling nations were ill-equipped to administer state-centric economic structures, the adoption of such governance systems had, in the overwhelming majority of cases, devastating results.

In addition to setting back national economies by several decades, the rapid expansion of central government power and responsibility brought about the public sector pathologies still felt today, such as corruption, mismanagement and inadequate services. In recent decades, the vast majority of these countries have attempted to reform their economies to rely more on private sector enterprise and capital.

More recently, in an attempt to improve efficiency and service quality, many of these governments initiated decentralization programs wherein the burden of service delivery is shifted to sub-national levels of government. To be effective, decentralization requires increased capability and administrative capacity on the part of local governments. Within the international development community, therefore, there is a growing emphasis on public sector reform and capacity-building, especially at sub-sovereign levels of government.

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